Understanding Our Global ARI Portfolio

Syfe’s Global ARI portfolios are designed to help you achieve your wealth goals. Each portfolio is a globally diversified mix of exchange-traded funds (ETFs) that include stocks, bonds and gold. In essence, you’re invested in thousands of companies from across the world, and from a broad range of industries, with just one portfolio. 

The building blocks of your portfolio

No Global ARI portfolio is exactly alike. Each portfolio is personalised according to your goals, investment horizon, and risk appetite. 

We start by asking you a few simple questions to understand your objectives better. Based on what you share with us, we’ll recommend an appropriate Global ARI portfolio type for your financial goals, timeline and risk level. You have the flexibility of proceeding with our recommendation or choosing your preferred portfolio type. 

Altogether, there are 11 Global ARI portfolio types available. Each portfolio type has a unique asset allocation based on it’s risk level. To illustrate, let’s consider three Global ARI portfolios with different risk levels – 5%, 15%, and 25%. 5% is the lowest possible risk level while 25% is the highest. 

You can see that the 5% risk portfolio has a lower stock allocation and a much larger percentage of bonds. The inverse is true for the 25% risk portfolio. 

In a nutshell, while all Global ARI portfolio types hold stocks, bonds and gold, the specific asset allocation for each portfolio type depends on its risk level. A 25% risk portfolio will have different stock, bond, and gold weightings as compared to a 15% risk portfolio. 

Portfolios for all your goals 

The different portfolio types available also mean that you can create different portfolios for different goals. Instead of putting your money all in one portfolio, it is far more effective to create multiple portfolios built around your specific goals. 

Your goals then form the basis for how we recommend the right level of risk for each portfolio. 

For goals with a longer time horizon, we’ll recommend that you hold a greater percentage of stocks in your portfolio through the higher-risk portfolios. You’ll have time to ride out short-term market volatility and enjoy greater returns in the long-term. 

For goals with a shorter time horizon, we’ll advise that you go with a lower stock allocation and more bonds. The 5% to 11% risk level portfolios could be something to consider. This is because your portfolio will have less time to recover from any market drops. You want to avoid large portfolio losses right before you need to use your investment funds. 

What’s inside each portfolio  

Diversification is frequently said to be the only free lunch in the world. We agree. That’s why each Global ARI portfolio is fully diversified across assets ranging from international and emerging market stocks, treasury and corporate bonds, and gold.

To do this in the most effective and cost-efficient way, we build our portfolios through broad-based ETFs. One of the central advantages of ETFs is low fees and the fact that they let you invest in multiple assets at once. Every Global ARI portfolio is invested in a carefully selected basket of 15 ETFs so you are not only diversified within an asset, but also across assets.

Here’s a snapshot of all the ETFs included in our 15% risk level portfolio, the most popular option amongst investors.

Stocks

For the stock portion of the portfolio, our focus is on global diversification. 

US market exposure

  • SDPR Select Sector Funds – Technology, Consumer Staples, Healthcare, Consumer Discretionary, Utilities
  • iShares Core S&P Mid-Cap ETF 
  • iShares Core S&P Small-Cap ETF 

International developed markets exposure

  • iShares MSCI EAFE ETF

Emerging markets exposure

  • iShares Core MSCI Emerging Markets ETF

This global diversification helps capture growth opportunities in developed markets such as Japan, Germany, Australia, and Switzerland, as well as expanding markets such as China, India and Brazil. Global diversification also decreases the risk that one geographical region alone will drag down your portfolio. 

Bonds

For the bond component, we’ve selected a mix of US treasuries and international bonds. 

  • Short and long term iShares Treasury Bond ETFs
  • Vanguard Total International Bond Index Fund ETF Shares
  • iShares Core U.S. Aggregate Bond ETF

These represent a mix of US government bonds and global investment grade bonds. 

Apart from being a diversifier for your stock allocation, our bond component also plays an important role in stabilising your portfolio during periods of market volatility. When volatility surges, our proprietary ARI algorithm will pull back on your stock allocation and increase your bond weightings. This cushions against major losses and helps your portfolio withstand market drops. As volatility subsides, your stock allocation will again be increased to capitalise on the recovery. 

Gold

Finally, our portfolio also includes gold via SDPR Gold Shares. Gold is an important part of a diversified portfolio. When investor confidence falls, gold prices often climb as nervous investors look for a safe haven to park cash they’ve pulled out of the market. Put simply, it is a hedge against volatility and economic uncertainty. 

Global ARI: A simple set-and-forget portfolio 

Ultimately, Global ARI is a diversified portfolio of low-cost ETFs that allows you to spend time on things that matter to you. There is no active trading, no need to check your stocks every day, and no need to manage and maintain your portfolio. It is a simple “set it and forget it” portfolio that will make you wealthy over time.

If this appeals to you, set up your Global ARI portfolio now. Your future self will thank you for it.